It accomplishes a couple objectives: 1) by keeping cargo on the water longer it reduces capacity (without laying up ships) and thus pressures rates a bit higher and 2) it avoids the $500,000 transit fee.
Combined with Russia's push to get firms to use the Northern Sea Route (see after the jump) Egypt is facing a tough situation.
From The LoadStar, May 6:
Lines using cheaper Cape of Good Hope route will cost Suez Canal $10m
The Suez Canal Authority (SCA) is set to lose over $10m in revenue from container lines routing vessels via the Cape of Good Hope rather than its waterway.....MORE
According to new Alphaliner research, “the number of containerships that have opted to use the Cape route and bypass the Suez Canal has risen to a historic peace-time high,” including at least 20 sailings on the Asia-Europe, Europe-Asia and North America east coast-Asia trades.
“A unique combination of a container tonnage surplus and rock-bottom bunker prices has increasingly prompted ocean carriers to avoid the canal – and thus its fees,” the analyst noted today.
“Rather unusually, even three westbound Asia-Europe headhaul sailings have opted for the Cape route, all operated by CMA CGM....
Previously:
April 5
Old School Logistics: CMA CGM Takes the Long Way Around
April 7
More Old-School Logistics: "Long route to Asia may be the best bet for US LNG exporters in weak market"
And on the Northern Sea Route, the majors are declining Russia's enticements for environmental reasons but there are a lot of ships on the ocean:
October 2019
Shipping: MSC Joins CMA CGM In Pledge To Avoid Northern Sea Route While Russia Offers to Pay Shippers to Use the NSR
August 24
"Macron Asks Shippers to Shun Arctic Route to Protect Environment" CMA CGM Says 'Oui'
May 2019
It's The Middle Of May, So Why Is This Arctic Class LNG Tanker Using The Suez Canal Instead Of The Northern Sea Route?
September 2019
Shipping: Egypt (Suez Canal) Is A Bit Nervous About Russia's Northern Sea Route
